Organization (Institutional Capacity and Roles) and Coordination; Human


To fully implement the SCMP, the MOH intends to create a new agency which is to be called the National Health Commodity Supply Agency (NHCSA). As noted above, the Ministry does not expect to have this new agency in place before the third quarter of 2013. When it is established, the new agency will to be responsible for implementing and

coordinating the majority of SCMP activities. To ensure that the NHCSA has a strong foundation, and that implementation of SCMP activities begins as soon as possible, the Chief Director is also to appoint an IMT, all of whose members will be prepared to put forth significant effort to build the foundations of this agency and to manage forward progress for many of the supply chain strategies outlined in this document. In the same period, the Minister of Health will guide the Cabinet Memo process for creation of the new agency. Following its appointment, the IMT will provide oversight and support to numerous IP activities. Highlights for 2012 include:

 Ensure that job descriptions for individual IMT members are finalized.  Draft a SCMP implementing agency Charter (as NHCSA is a new agency).

 Develop budget and work plan for IMT and SCMP activities for 2013, and develop and implement advocacy plan for new agency (for financial support of donors).  Complete draft of transition plan for staffing new agency (start-up and long-term

needs) ensuring that each mandated role is staffed appropriately.

 Develop Terms of Reference for activities that are to be provided by technical assistance, as outlined in the SCMP, and provide oversight to these tasks, in conjunction with the TWG.

 Complete development/negotiation on list of commodities new agency will handle (short- and longer-term).

 Advise MOH on appropriate location(s) for various activities of new agency.  Ensure completion of key reviews and studies as described in the Implementation

Plan (IP) (e.g. markup policies and related guidelines; drug and medical supply pricing and reimbursement; procurement rules; RMS capacity; network optimization).  Ensure resolution, by TWG and/or MOH, of key questions that remain within

SCMP (most are which are related to key reviews/studies noted above).  With MOH support, create an IT Committee to organize and begin the

review/selection process for an integrated, technology-based information system to manage health commodity data.

Additional activities for 2013 include:

 Continue dialogue with partners and stakeholders to define and clarify roles and responsibilities of the new agency, including transition plans and schedules.  With TWG, set short- and mid-term priorities for strengthening the supply chain,

and develop draft budget and work plan for IMT and SCMP activities for 2014, including plans for resource mobilization.

 With TWG, ensure that results and recommendations of reviews and studies are presented to the MOH and its agencies for review and action.

 Support implementation of activities that result from decisions made by the MOH as a result of reviews/studies completed by MOH, TWG, IMT, and/or consultants (e.g., distribution network, transport services, information systems, etc.).

 Develop and initiate implementation of a short-term strategy for increasing the capacity of existing supply chain personnel.

 Support MOH in selection of candidates for the Board of Directors and management team for the new agency.

 At the appropriate time, develop and obtain approval for Terms of Reference for Supply Chain Coordinating Committee (SCCC), including membership list.

 Assist with planning and implementation of assessment of debt situation within the supply chain, and ensure that MOH completes such a study.

 Define monitoring and supervision/oversight mechanisms for the new agency, including possible performance-based compensation options.

 Develop draft repayment strategy/policy options for MOH and support implementation of new policies and procedures.

 Draft mechanisms for managing adherence to new pricing and/or procurement procedures, especially at the facility level.

 Draft a plan of action for revising procurement rules within the MOH and develop monitoring procedures (with TWG and GHS).

 Support and advocate for ongoing efforts of IT Committee on review/selection process for an integrated, technology-based information system for the management of health commodity data.

 Define the mission, roles, responsibilities, and performance indicators (expectations) for new agency’s procurement team, and advocate for financial and other support.  Support the selection of tools for managing the new agency’s warehouses and for

 Support MOH decisions regarding distribution network and transport services, in conjunction with RHAs, MOH, and GHS, leading to implementation of specific strategies.

 Support development of SOPs and training materials for new LMIS, distribution mechanisms, and other supply chain policies and procedures, including supportive supervision.

 Complete system design process for LMIS, in conjunction with activities of IT Committee.

 Develop and support advocacy plan for resourcing new information system, once requirements, design, and selection processes are complete.

 Help improve clarity regarding roles and responsibilities related to managing the quality of medicines and medical devices and advocate/request for resources to perform these roles and responsibilities.

 Ensure that the list of commodities the new agency will handle (short- and longer- term) is updated annually, preferably before completion of work plan and budget for 2014.

 Draft new guidelines for managing the quantification of all essential health

commodities, including how, when, how often, and by whom various quantification tasks will be performed.

 Monitor identified risks within SCMP on quarterly basis to ensure that key issues are addressed.

It is anticipated that, when the new agency is created and the Board of Directors and the management team are selected and put in place, the TWG and the IMT for the SCMP will be disbanded. The MOH will need to ensure, however, that an appropriate transition period is provided, especially if members of the new agency’s management team and the IMT do not overlap. At this point, the new agency is expected to continue the implementation activities as defined in the SCMP and continued during the transition period. The goal of these years (2014‒2017) will be to complete the installation of new systems and procedures to support a new and improved supply chain.

5.2 Financing, Resource Mobilization, and Commodity Pricing

The new agency has a number of significant challenges in this intervention area, as prices for medicine and medical supply items have been one of the primary reasons behind the desire to improve the health commodity supply chain. NHIA has a keen interest in significantly reducing purchase prices at the facility level, as recent data suggest that over 50% of its reimbursement payments are attributable to medicines and other health commodities. The new agency will need additional resources not currently available to build responsive and more reliable systems, improve supply chain services for clients and facilities, and enhance overall supply chain performance.

Key interventions and activities during the 2012‒2013 transition period, and after the formalization of the new agency, include:

 Finalize cost estimates for implementing the SCMP over the life of the plan (five+ years) and using these figures to advocate for operational and investment resources (government and donors).

 Settle outstanding debts within the health system related to health commodities, and implement a specific plan of action to avoid a repeat of these payment problems.

 MOH, NHCSA, and NHIA collaborate to significantly reduce the total cost of all drugs and medical supplies purchased for public sector use.

 Develop and enforce new pricing and/or markup policies

 Develop and implement, over time, a strategy for full cost recovery for the new NHCSA, including the regular use of fee-setting tools

 Consider performance-based compensation and/or performance incentives for the new agency’s management.

5.3 Procurement

The procurement of medicines and medical supplies is another area of significant concern, as medicines and medical supplies are currently being purchased at all levels of the supply chain and by almost all facilities within the public sector system. While benefiting the facilities in terms of service (direct delivery by suppliers), this practice has had important adverse consequences as well, particularly in terms of high average prices, and poor quality for medicines and medical supplies, and payment delays and non-payment for commodities received from the public sector supply chain commodity providers (namely, the 10 RMS and the CMS).

In recent years, these debts have grown in size to the point where cash flow problems at the central and regional levels have inhibited the ability of public sector procurers to maintain revolving funds and replenish commodity inventories. While these outcomes from the Procurement Act of 2003 are likely unintentional, procurement fragmentation has had negative consequences on supply chain performance.

The MOH, GHS, NHCSA (the new agency) and NHIA need to find solutions to these pricing and payment challenges. Key interventions and activities include:

 Develop and implement strategies, policies, procedures, and/or rules to address the fragmented procurement situation within the public health sector.

 Define procurement roles and responsibilities going forward to create more efficient and effective procurement mechanisms and increase procurement performance (responsiveness, cost-effectiveness, use of more effective procurement mechanisms, etc.).

 Strengthen and maintain procurement capacity, wherever it exists.

 Ensure that financial resources are available to allow the supply chain to complete its procurement activities on schedule.

5.4 Distribution—Storage, Transport, Inventory Management, and Waste